DOE, INDUSTRY WATCHING PROPANE SUPPLY

The Department of Energy has met with U.S. propane industry representatives to discuss ways to avoid a shortage of that fuel this winter.

DOE said propane stocks remained relatively low at 52.9 million bbl on Nov. 1.

It said, "Despite the small but consistent stockbuilding of U.S. propane inventories during the last 3 weeks, which is atypical for this time of year, current inventory levels continue to remain near the lower boundary of the average range for the past 3 years.

"The increase in stock levels is due to continued declines in demand for propane as a feedstock by the petrochemical industry in the Gulf Coast region."

DOE said depressed natural gas prices last summer also drove down gas liquids prices, resulting in diversion of low priced propane to the petrochemical market (OGJ, Sept. 23, p. 70).

Deputy Energy Sec. Henson Moore said, "in 1989 we had regional propane shortages. I called in the industry representatives because for the third year in a row it appears there could be a shortage.

"We have taken the initiative to begin working with the industry now so if the winter is colder than anticipated these problems can be avoided. We want to work with the industry to make sure nobody goes without propane this winter. This year, the Weather Bureau projects above normal temperatures in the East, and that is a plus, but one must be ready for the unexpected."

DOE also simulated a propane shortage in a tabletop exercise with industry and state and local officials. The goal was to discuss what could be done if supplies were tight and how best to coordinate efforts.

Julian Wright, deputy assistant secretary of DOE for energy emergencies, said "it is our hope that this exercise enabled each participant to take away information and perspectives helpful in updating contingency plans for dealing with potential energy distribution problems.

"The exercise also helped facilitate effective working relationships among key members of the propane industry, state, local, and federal governments."

Attending the meeting were propane producers, transporters, and distributors, as well as representatives of the National Governors Association, Association of State Energy Officials, Coalition of North Eastern Governors, New Hampshire, New York, Maryland, Kentucky, Ohio, and Wisconsin.

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